Important macro week ahead with CPI, PPI and also 4Q24 earnings season starts with $JPM and others. Array ( [cookie] => d6d4cb-5882e4-0c6819-cd3017-52fb41 [current_usage] => 1 [max_usage] => 2 [current_usage_crypto] => 0 [max_usage_crypto] => 2 [lock] => [message] => [error] => [active_member] => 0 [subscriber] => 0 [role] => [visitor_id] => 0 [reason] => Usage under limits [method] => ) 1 and can accesss 1

VIDEO: We discuss how the macro has muddled in the past few weeks stemming from multiple factors but the fundamentals remain intact.  Technicals however remain soft

Please click below to view our Macro Minute (duration: 8:34).

Last week, the S&P 500 fell -2%, bringing cumulative decline since 12/6 to -5%. Mark Newton, our Head of Technical Strategy, has warned the technical picture has weakened for stocks and with the recent close below S&P 500 5,829, that a downside target towards 5,700 is possible (-2% downside).

• The S&P 500 has been trading generally lower since Dec 6th:
  – in past 22 trading days
  – S&P 500 has fallen -5%
  – down 14 of those 22 trading days
• This is the mirror image of Nov 4th to Dec 6th:
  – in those 23 trading days
  – S&P 500 rallied +7%
  – rising 18 of 23 trading days
• Are we nearing the end of this selling? Mark Newton, Head of Technical Strategy, warns that:
  – “5700 lines up near last November’s lows and has some Fibonacci-related properties based on the prior August-December rally… but…based on the lack of capitulation showing up into Friday given lackluster TRIN levels (ARMS index) and subdued Equity Put/call data, it might still take some additional time before US Equities can stabilize.”
• In other words, the near-term looks choppy and investors should be wary for now. From a fundamental perspective, on the margin, macro visibility has muddled in the near-term (even as fundamentals remain intact). Among the somewhat obvious and less obvious factors:
  – Policy uncertainty incoming White House “tariffs”
  – this impacts Fed FOMC forecasts reflect uncertainty “policy” (evidenced by FOMC minutes)
  – last year’s hurricanes muddle goods inflation (used cars and hotels prices)
  – even inflation survey now seem “polluted” by politics
  – as amply evidenced in the U Mich inflation survey last week
• Looking forward, the current Los Angeles fire is estimated to cost $150 billion-plus (Accuweather.com), the costliest ever for California. And this will impact 2025 inflation, GDP growth and construction activity.
  – combined with Hurricane Helene, this is $400-$450 billion in damages
  – US GDP is $30 trillion USD
  – the natural disasters are 1.5% of GDP, quite meaningful
• So, there will be incremental challenges in seeing the true trend on inflation and employment. This will impact Fed path forward and will impact how markets react.
• However, even as these “headwinds” to near-term visibility are in place, this does not mean the positive factors for 2025 are negatively impacted:
  – The Fed is still dovish, aka Fed “put” intact
  – Incoming Pres Trump wants a higher stock market, aka Trump “put”
  – ISM manufacturing turning up after 2.5 yrs <50, a positive inflection
  – Probabilities favor inflation cooling in 2025, despite “second wave” inflation-istas
  – 4Q24 earnings season starting this week
• The CPI report on Wed is the most important of the macro data this week:
  – 1/13 Mon 11:00 AM ET: Dec NYFed 1yr Inf Exp
  – 1/14 Tue 6:00 AM ET: Dec Small Business Optimism Survey    102e
  – 1/14 Tue 8:30 AM ET: Dec Core PPI MoM    0.25%e    
  – 1/15 Wed 8:30 AM ET: Dec Core CPI MoM    0.24%e
  – 1/15 Wed 8:30 AM ET: Jan Empire Manufacturing Survey    3e
  – 1/16 Thu 8:30 AM ET: Dec Retail Sales Advanced MoM    0.6%e
  – 1/16 Thu 8:30 AM ET: Jan Philly Fed Business Outlook    -5e
  – 1/16 Thu 10:00 AM ET: Jan NAHB Housing Market Index    45e
  – 1/17 Fri 4:00 PM ET: Nov Net TIC Flows
• The Street is looking for Core CPI (avg est) of +0.24%. This is an improvement over the +0.30% estimates for the prior two months (Oct and Nov) and if this reading meets consensus, the lowest reading since July 2024. There is going to be ongoing distortions from the recent Hurricanes (hotel and used car prices).
  – but a better than expected Core CPI reading could be a positive catalyst
• Earnings season also starts this week and on Wednesday, the same day as Dec CPI report:
  – the following major financials report
  – JPM -1.05%  C -1.05%  BLK -0.84%  WFC -0.08%  GS -2.03%
  – earnings could be the positive pivot point for stocks.
• There is also Fed speak this week:
  – 1/14 Tue 10:00 AM ET: Schmid Gives Remarks in Kansas City   
  – 1/14 Tue 3:05 PM ET: Williams Gives Opening Remarks   
  – 1/15 Wed 9:20 AM ET: Barkin Speaks in Annapolis   
  – 1/15 Wed 10:00 AM ET: Kashkari Participates in Q&A   
  – 1/15 Wed 11:00 AM ET: Williams Gives Keynote Remarks   
  – 1/15 Wed 12:00 PM ET: Goolsbee Speaks at Midwest Econ Forecast Forum  
• There are more “doves” speaking on Wednesday, including Goolsbee.

Bottom line: we are going through turbulence now, but don’t lose sight of positive fundamentals

The turbulent and weak markets seen since Dec 7th have continued. And this has brought about technical damage. But as we noted above, the fundamental positives remain intact. This week is important because of:

• important macro, including Dec CPI Wed
• 4Q24 earnings season commencing
• markets could be nearing key levels, but Newton is wary since there is no signs yet of capitulation

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Key incoming data January:

• 1/2 9:45 AM ET: Dec F S&P Global Manufacturing PMI Tame
• 1/3 10:00 AM ET: Dec ISM Manufacturing PMI Tame
• 1/6 9:45 AM ET: Dec F S&P Global Services PMI Tame
• 1/6 10:00 AM ET: Nov F Durable Goods Orders Tame
• 1/7 8:30 AM ET: Nov Trade Balance Tame
• 1/7 10:00 AM ET: Dec ISM Services PMI Tame
• 1/7 10:00 AM ET: Nov JOLTS Job Openings Tame
• 1/8 9:00 AM ET: Dec F Manheim Used vehicle index Tame
• 1/8 2:00 PM ET: Dec FOMC Meeting Minutes Tame
• 1/10 8:30 AM ET: Dec Non-Farm Payrolls Hot
• 1/10 10:00 AM ET: Jan P U. Mich. Sentiment and Inflation Expectation Hot
• 1/13 11:00 AM ET: Dec NY Fed 1yr Inf Exp
• 1/14 6:00 AM ET: Dec Small Business Optimism Survey
• 1/14 8:30 AM ET: Dec PPI
• 1/15 8:30 AM ET: Dec CPI
• 1/15 8:30 AM ET: Jan Empire Manufacturing Survey
• 1/15 2:00 PM ET: Jan Fed Releases Beige Book
• 1/16 8:30 AM ET: Dec Retail Sales Data
• 1/16 8:30 AM ET: Jan Philly Fed Business Outlook
• 1/16 10:00 AM ET: Jan NAHB Housing Market Index
• 1/17 9:00 AM ET: Jan M Manheim Used vehicle index
• 1/17 4:00 PM ET: Nov Net TIC Flows
• 1/24 9:45 AM ET: Jan P S&P Global Manufacturing PMI
• 1/24 9:45 AM ET: Jan P S&P Global Services PMI
• 1/24 10:00 AM ET: Jan F U. Mich. Sentiment and Inflation Expectation
• 1/24 10:00 AM ET: Dec Existing Home Sales
• 1/27 8:30 AM ET: Dec Chicago Fed Nat Activity Index
• 1/27 10:00 AM ET: Dec New Home Sales
• 1/27 10:30 AM ET: Jan Dallas Fed Manuf. Activity Survey
• 1/28 9:00 AM ET: Nov S&P CoreLogic CS home price
• 1/28 10:00 AM ET: Jan Conference Board Consumer Confidence
• 1/28 10:00 AM ET: Dec P Durable Goods Orders
• 1/29 2:00 PM ET: Jan FOMC Decision
• 1/30 8:30 AM ET: 4Q A 2024 GDP
• 1/31 8:30 AM ET: Dec PCE Deflator
• 1/31 8:30 AM ET: 4Q Employment Cost Index

Economic Data Performance Tracker 2025:

Economic Data Performance Tracker 2024:

Economic Data Performance Tracker 2023: